Verizon, AWS & 700MHz Spectrum, and why they don’t need a Broadcast ‘incentive auction’
I think there is good reason to now attack the very premise of the UHF Broadcast Spectrum ‘incentive auction’ based on what is going on with Verizon and its pursuit of the AWS spectrum. Things are unraveling at this time because Verizon is smart enough to see that Broadcasters are not going to ‘roll over and die’, the amount of spectrum that comes out of a repack and auction is fairly minimal, and the fact is their wanting of our spectrum was more about pushing our demise as anything else. Things are unraveling at this time because Verizon never really wanted Broadcaster’s spectrum, they simply want to continue the story of our irrelevance. Time to go on the offensive!!! Let’s look at a few facts…
The above represents current freq. use in US. (from http://en.wikipedia.org/wiki/Cellular_frequencies)
Verizon wants to take possession of the AWS spectrum held by SpectrumCo (below from http://www.phonescoop.com/articles/article.php?a=99&p=1495)
The AWS spectrum band lines-up with their existing spectrum assets better, and makes sense for Verizon for (possibly) several reasons.
First, phone ‘radios’ are already designed operating in the frequency region (AWS vs. UMTS &DCS). (below from http://www.phonescoop.com/articles/article.php?a=99&p=1493)
Secondly, this band (2GHz) allows for denser cell spacing which means more ‘bits per user’ is possible (also argument for the importance/value of the band used by Clearwire/WiMAX http://www.forbes.com/sites/joanlappin/2011/08/19/everybody-covets-that-clearwire-spectrum/print/, but that’s another story…). The 2GHz band frequencies travel a shorter distance which is what allows the tighter spacing and better frequency reuse within the band. If Sprint were not so cash strapped, they would jump on the bandwagon (IMHO).
Thirdly, Verizon is at a severe disadvantage in its holdings within this 2GHz band. (below from http://www.fiercemobilecontent.com/pages/top-700-mhz-and-aws-license-holders#jump)
From the above you can see that if Verizon ‘gets’ SpectrumCo holdings, they end up with more than twice that of AT&T (and almost twice that of T-Mobile) While 2GHz (AWS) spectrum is good at filling in density, it is NOT as good as 700MHz & 800MHz spectrum for in-building penetration and broad coverage. Take a look at the 700MHz holdings (below from http://www.fiercemobilecontent.com/pages/top-700-mhz-and-aws-license-holders#jump).
Keep in mind, the AT&T / T-Mobile merger attempt was just as much about these spectrum holdings (2GHz) as the rest of its holdings…. (http://www.fiercewireless.com/story/visualized-aws-and-700-mhz-spectrum-att-could-gain-t-mobile/2011-06-28)
Where does this leave perception of “the auction”? How do we generate a story about Congress and the FCC being ‘hood-winked’ by Verizon? Looming spectrum crisis? If there were a crisis, would they REALLY be giving up the 700MHz they have? BTW…700MHz is better than 600MHz, so I doubt they can argue they will wait for better spectrum to come out of the ‘incentive auction’.
NAB, this needs to be brought back up to the hill! Just a few thoughts from a guy that suspects something ‘fishy’ is going on…